AMD gets U.S. approval for Abu Dhabi investment

The federal government has determined there are no national security concerns with a joint venture between Advanced Micro Devices Inc. and the Emirate of Abu Dhabi that would build a $4.6 billion computer chip factory in Malta.

The Committee on Foreign Investment in the United States, an arcane federal board that investigates large business deals with foreign companies for national security issues, told AMD in a letter dated Monday that the joint venture may proceed. AMD received the letter today, said spokesman Travis Bullard.

Abu Dhabi is investing as much as $9 billion in the joint venture.

AMD, as part of the deal, will spin off its manufacturing, which includes two factories in Germany, to a new company called The Foundry Co. that will make computer chips for AMD and others.

The Malta factory, planned for the Luther Forest Technology Campus, would be build by the joint venture. Land could be cleared starting in March.

AMD must also get shareholder approval for the spin-off, although no date for that vote has been set.

One Response

I am completely surprised by the CFIUS approval…who’da thunk Paulson could slip away from the Hot Spotlight of the Economy’s Meltdown? But I would NOT be surprised if the next action is a legal roundhouse from INTEL. The two companies have never been known to be “Best Buds.” More than one savvy analyst noted the litigious liability on the day AMD’s partnership and THE FOUNDRY were announced. From InternetNews 10/08/2008-

“Intel may want to have a word with AMD about its spin-off news. The firms have cross-license agreements dating back to 1976, although that hasn’t stopped them from suing each other. The latest agreement, last signed in 2001, requires AMD to hold on to its fabrication business at least in part. An Intel spokesman said Intel has ‘serious questions about today’s announcement’ as pertains to the terms of the agreement.”

The Abu Dhabi bankroll is carefully protected in the 8-K filed with the SEC, SO well-protected that a INTEL needs only to initiate a legal challenge to open an escape clause, specifically paragraph 4 of Item 1.01– (The deal can go forward provided) “(iv) the absence of proceedings or litigation that would result in a material adverse effect on the Company;…”

We also need to see if Governor Paterson is going to demand proof that THE FOUNDRY meet a new standard: The combination of wages and capital investments must be at least 20 times greater than the $1.2 billion in Empire Zone benefits.

Any way you slice the silicon wafer, this will be a VERY close finish.